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Understanding Your IRS CP504 Notice

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IRS Notices - IRS CP504 - FAQ

What does IRS Notice CP504 mean? CP504 is an urgent notice informing you that you owe a tax debt and that you must respond immediately. The IRS intends to levy (garnish) your state tax refund if no response is received.


If you are receiving an IRS notice such as a CP504 or CP503, you better watch out for an asset seizure. An IRS levy (#IRSgarnishment) can happen at any time. How many notices does the IRS send before Levy? Normally, you will get a series of four or five notices from the IRS before the seize assets. When you start receiving a CP503, CP504, a Notice of Intent to Levy, or a Notice to Levy, your wages, bank account and other assets are in serious jeopardy. How long does it take the IRS to seize? If you fail to resolve your tax debt (liability), the IRS can start seizing your assets after 30 days. Most often, IRS enforcement is run through the "Automated Collection System" (ACS) which is the IRS computer. The computer matches up the tax debtor with the financial information being sent in by employers, banks, Social Security Administration, etc.


When the ACS makes a match, the levy order is sent out. If you have a severe tax problem based on the amount of tax debt or numerous tax returns hat are non-filed, then a Revenue Officer will be assigned and things will escalate and become even more egregious.

What's the most the IRS can levy and garnish? Most often, you'll get to keep a certain amount of your paycheck. The IRS determines your exempt amount using your filing status, pay period and number of dependents. What will be left will not be enough to pay your everyday expenses. Also, the IRS can implement what is called a "Manual Levy." a Manual Levy simply needs a Revenue Officer to sign off on it. With this type of Levy, the IRS can take 100% of the asset (wages, etc.)


Can the IRS seize my paycheck or bank account without notice? The IRS cannot freeze and seize monies in your bank account or paycheck without proper notice. A wage levy is continuous which means is just goes on and on until the tax debt is paid in full or the levy release.


With a bank levy, your bank will receive a notice of seizure of your funds, your bank has an obligation to hold the money for at least 21 days before paying it over to the IRS. You will have 21 days to save your money. This 21 day period includes Saturdays, Sundays and holidays. So, you really do not have 21 work days. How often can the IRS levy my bank account? The IRS can levy a bank account more than once. When the IRS levy's your bank, it is not a standing levy, which means you can deposit money the next day. An IRS bank levy attaches to funds sitting in your account at the moment the levy hits. Once the bank processes the tax levy (21 days) and sends the money captured to the IRS, the IRS can start all over again and hit you with another levy. It may be a good idea to use a checking account that does not earn interest. If it earns interest, your bank will report it to the IRS. Can IRS see your bank account? The Short Answer: Yes. The IRS probably already knows about many of your financial accounts, and the IRS can get information on how much is there. Remember the "Automated Collection System" we wrote about above? If you earn interest, that is income. Income is reported to the IRS. It's an easy match to match to make. AS AN FYI, THE TAX PROFESSIONALS AT FLAT FEE TAX RELIEF ROUTINELY CAN HAVE A WAGE GARNISHMENT AND BANK LEVY RELEASED BY THE IRS IN ONE DAY. The above article is brought to you by the tax pros at Flat Fee Tax Relief. We are strategically located in Clearwater, Florida, and San Diego, California. This allows our teams to be available to taxpayers from coast to coast. Our hours are from 8 A.M. Eastern to 6 P.M. Pacific time. Our hours come in handy when having an IRS levy is really important.

IRS CP504 - IRS Levy Info

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